WebJun 3, 2024 · You therefore sell a 1-month, $95 put. For selling this put, you receive $3 in premium which is $300 in total. You also have the obligation to buy 100 shares at $95 if called upon to do so which would cost $9,500. If assigned, your net cost to purchase the shares would be $9,200 due to the $300 premium received. WebThe buyer exercises their option and buys your 100 shares for $12 each and immediately sells them for $15 ($1,500 total) walking away with a $200 profit ($300 - $100 premium). …

The Math Behind Making $100,000 Each Year Selling Options

WebIf you're worried the price might drop more than 5%, you can buy a $47.50 put, which gives you the right to sell your shares for that price until the option expires. Even if the market price falls to $35 per share, you can sell for $47.50, potentially limiting your losses or protecting profits. WebDec 13, 2024 · What is a Put Option? Buying a Put Option. Investors buy put options as a type of insurance to protect other investments. They may buy enough... Selling a Put … cisco ip dhcp relay

Basic options strategies (Level 2) Robinhood

WebIf you sell your option for more than your purchase price, you’ll profit. If you sell it for less than your purchase price, you’ll realize a loss. And if you sell it at the same price as your purchase price, you’ll break even. Roll your position You can also roll your position. WebPut option: Gives the holder the right to sell a number of assets within a specific period of time at a certain price. Call option: Gives the holder the right to buy assets under those same... WebJun 3, 2024 · You therefore sell a 1-month, $95 put. For selling this put, you receive $3 in premium which is $300 in total. You also have the obligation to buy 100 shares at $95 if … cisco ip dhcp pool lease